BOTTOM HUNTER

In our last letter I looked at the macro case for this coming year and emphasized the liquidity environment being the #1 factor, and to expect more of it. In the shorter term I expected chop & turbulence, Bitcoin at 60-70k, and to “let the market come to you”. I also told you Trump would invade Iran Feb 3^rd: “In terms of major catalysts, I’d expect Trump to invade Iran in the coming weeks”.

Well, we’ve ticked most of those boxes with two primary catalysts: 1. The Iran war, and 2. The “SAASpocalypse” with software stocks selling off 30%+ as the market finally realizes many names can’t justify earnings multiples with AI potentially eating their business. The value proposition for software stocks is really dependent on a strong moat, and how resistant/adaptive they are to the capabilities of the latest AI’s. There are opportunities here…

On another note, I have something VERY special for subscribers in this issue. My greatest indicator ever, Bottom Hunter is setting up to fire next week. Provided conditions continue to deteriorate and VIX rises for another few trading days Bottom Hunter will trigger, and create one of the highest risk reward opportunities since the tariff lows. Grab a coffee and strap in…

The war in the middle east continues to escalate, and despite Trump’s promises of “four weeks”, it’s starting to look very dangerous for the entire region. When has a US war ever been over in a few weeks? Remember the old adam smith quote “Nothing is more permanent than a temporary government program”. Most of these operations drag out for years.

While much of Iran’s big military capacity has been taken out, the realities of war are often very different from what the media likes to tell you. Ukraine was fought with drones and mortars. After the initial few weeks, it’s not weapons, but supply lines, capacity, and logistics that move the needle. Defensive capabilities like missiles shields deplete FAST, and will not be able to keep up with Iran’s missile and drone inventory. The “closing” of the Straight of Hormuz also presents huge collateral problems. Even if the US can secure it again, the insurance rates have skyrocketed and it will take months for any kind of meaningful tanker traffic to return. Oil, fertilizer, and industrial inputs for large parts of the globe run through there. The other potential catalyst is water, much of the arab world relies on desalination plants, and if those are hit as the conflict escalates this will get out of control FAST. Regardless, war is almost always bullish for markets, especially once the peak fear has set in. I believe next week may present one of the best buying opportunities in a year.

In my last letter I emphasized the 60-70k zone for bitcoin, and we tapped just shy of 60k and have put in a convincing bottom and support. While this isn’t my first crack at calling a bottom here, there is a lot to like here both from a chart perspective, and from an on-chain view. This is the highest R/R we’ve seen since mid 2025 and putting some capital to work is wise. I believe once Gold starts to correct a bit more, a huge amount of that capital can flood back into crypto.

Software is down almost 40%, and I like buying *select names in this sector for a potential rebound. Notice the incredibly tight correlation to bitcoin in orange…

The US Dollar often wags the dog… In my last update I emphasized: “Ultimately, the US dollar runs the show, and the valuation relative to peers will have a huge impact on risk assets, bonds, and crypto. Currently, most of the articles you read are about the “death of the dollar” and seem to be ripe with bearish sentiment. While this isn’t a slam dunk entry, I see significant support here on the DXY, so short term caution is warranted, especially for metals bulls and Crypto.”

Currently we are up 300bps on the DXY… I’d expect a bit higher next week and then we can look at a retrace to setup a bullish move for risk assets.

In my last update I also emphasized bullish oil:

We certainly went past target here and have catapulted to $90/barrel. One more blowoff is possible but I would be scaling out of longs up here.

Bottom Hunter is quite simply one of the greatest long term dip buy indicators that exists. It typically only fires every few years, and in the past two decades it’s called almost every major low within a few days of the bottom. The best part is… I can see it coming…

Bottom hunter uses proprietary metrics, but relies heavily on options data – so to trigger a signal we will need more “fear” into next week, and ideally lower indices. A big rinse would cement the signal and get me VERY excited about buying dips… The only different between this potential signal and recent ones is that indices have not fallen *that much, so I would really like to see better deals to be buying in size.

Looking at VIX in isolation, one more push into 35~ could certainly be in the cards next week.

What I like here…

AliBaBa – getting very value priced in this zone and a safe add for longs again..

Richtech Robotics – Commercial Robotics, in a great support zone for a move into Q2/Q3

The Nuclear Sector is all at support…

TLDR;

1. NEXT WEEK is likely the low – IF we keep pressing down.

2. BTC is a good value here relative to equities/Gold

3. Nuclear/Uranium + Software sector are deeply oversold, consider names in there

4. SAVE CASH for next week, I have a huge chunk waiting to deploy and I prefer the markets to get WORSE.

New Positions (all of these are SMALL for now):

- SMR May 15^th 20C at .48 (pure lotto, consider just shares)

- OKLO May 15^th 90C at 2.95

- RR Shares $2.40

- BABA Shares $131.50